Limited vs Partial Relief Under the CRA VDP in Canada

If you have read older material about the Voluntary Disclosures Program, you may have seen the terms general relief and limited relief. You may now be wondering which one applies to you and what it means for your bill.

The terms have changed. The CRA now looks at whether your application was prompted by something the CRA already did. This article explains the difference in plain words and how to work out where you probably fall.

This article covers Canadian federal tax law, which applies in every province.

What happened to limited relief

The CRA's current circular, IC00-1R7, applies to VDP applications received on or after October 1, 2025, and earlier applications fall under IC00-1R6. Under the current circular, the two outcomes are unprompted (general relief) and prompted (partial relief).

So if you are reading about limited relief, you are most likely reading older material. For a new application, the question is whether it is unprompted or prompted.

The two levels side by side

Unprompted applications normally receive 100% relief of the applicable penalties and 75% relief of the applicable interest. Prompted applications normally receive 25% relief of the applicable interest and up to 100% relief of the applicable penalties. For GST/HST the relief levels match income tax.

Unprompted or prompted: how the CRA decides

An application is generally unprompted if the CRA has not communicated with you about the compliance issue, or if the only contact was a general education letter.

An application is generally prompted if it follows CRA communication identifying a specific error or setting a correction deadline, or follows third-party information about your non-compliance. An education letter alone does not make it prompted.

• No contact from the CRA on the issue: likely unprompted.
• Only a general education letter: likely unprompted.
• A letter naming a specific error or setting a deadline: likely prompted.
• The CRA received third-party information about you: likely prompted.

What does not change between the two

The VDP gives relief on penalties and interest, not on the tax itself, so the tax owing must be paid. Eligible applicants are protected from prosecution for the disclosed information, and gross negligence penalties do not apply to that information.

A CRA letter about a specific issue does not by itself end your eligibility. The CRA treats the application as prompted if you are not under audit or investigation. If an audit or investigation has already been started against you or a related taxpayer for the disclosed information, the disclosure is not voluntary.

What to do next

• Gather every letter or notice you have received from the CRA and note what each says.
• Check whether any contact named a specific error, set a deadline, or followed third-party information.
• If you are unsure whether to apply, you can hold an informal, non-binding discussion with the CRA on an anonymous basis.
• Speak with a tax lawyer or accountant about whether your application is likely to be unprompted or prompted before you file.

The CRA's decision letter states whether your application was treated as unprompted or prompted, the relief level and the eligible tax years. Because the answer turns on your exact history with the CRA, it is worth confirming with a professional.

Frequently asked questions